The Ministry of Finance welcomes the vote today in the Rada
that authorized the Government of Ukraine to decide on suspension of payments
of state and state guaranteed debt to international commercial creditors.
As agreed with the IMF, the Government has engaged in
negotiations with international commercial creditors as part of its debt
operation to achieve the three following goals:
· Generate US$15.3 billion
savings in public sector financing during the four-year IMF program
· Bring the public and publicly
guaranteed debt/GDP ratio under 71% of GDP by 2020
· Keep the budget’s gross
financing needs at an average of 10% of GDP in 2019–2025; maximum of 12% of GDP
in any given year
In order to achieve these goals, Ukraine’s debt
restructuring must include a combination of maturity extension, coupon
reduction and principal reduction.
The Ministry of Finance is hopeful that a good faith
collaborative solution can be found with Ukraine’s international commercial
creditors and appropriate restructuring terms can be agreed rapidly. Otherwise,
in order to defend the interests of the Ukrainian people, the Government may
have to suspend payments of state and state guaranteed debt to international
The Moratorium Law adopted today gives the Government
of Ukraine the authority to suspend payments on certain external sovereign and
sovereign guaranteed debt. This law demonstrates the seriousness of our
difficult financial position and the need to rapidly conclude a debt operation
that meets the three targets in our IMF Extended Fund Facility program.
Any moratorium declared by the decision on the Government of Ukraine under the
new law in the future would not affect our domestic, state banks, nor Ukrainian State Railways obligations.